Sales Tax

Revised July, 1 2013


At present, the State of Alaska does not levy a sales tax. There are, however, several municipal governments that do. The state constitution and other state law give very broad authority to cities and boroughs regarding sales tax; however, a sales tax is not authorized unless an election is held on the question and it is approved by a majority of the voters.

There are very few non-taxable items (exemptions) required by state law. This allows a municipality a lot of power to decide what is and is not taxable. State law also allows municipalities that levy a sales tax to levy a use tax, which is a tax levied on the storage, use, or consumption of goods in a municipality.


There is currently little state regulation of sales and use tax. State law gives local government’s broad authority in enacting a sales tax ordinance and determining what is and is not taxable. At one time there was a limit on the maximum amount a municipality could charge for a sales tax, but that limit has been removed. For information on what is not taxable, contact the municipality directly. There are some exemptions spelled out in state law; however, other than these few required exemptions, exemptions are a local issue. Out of 162 municipal governments on the state approximately 110 levy some form of a sales tax which range from a low of 1% to a high of 7%. If both a borough and a city located within that borough levy sales taxes, the sales tax due from the consumer is the sum of the two taxes.

Frequently Asked Questions

Applicable Laws

State of Alaska Constitution
  • Article IX, Section 1 - taxing power
  • Article X, Section 1 - provision for maximum local self government and non-duplication of taxing jurisdictions
  • Article X, Section 2 - dedication of taxing powers to boroughs and cities only
State Statutes
  • AS 29.35.010 - General powers and duties of municipality, authorization to levy tax and enforce tax law
  • AS 29.35.170 - Assessment and collection of tax, borough collection of city tax
  • AS 29.45.650 - Borough sales and use taxes, exemptions by ordinance, interest on delinquent sales tax - limitations, liens, lien priority, mandatory exemptions
  • AS 29.45.670 - Notice of tax, publication period, revenue sharing requirement
  • AS 29.45.670 - Referendum, adoption and modification
  • AS 29.45.680 - Combining sales and use tax with incorporation of a borough, incorporation subject to passage of tax
  • AS 29.45.700 - City sales and use tax, power of levy, borough levy, borough ordinance authorizing levy of tax,
  • mandatory exemptions,
  • AS 29.45.710 - Combining sales and use tax with incorporation of a second class city, incorporation subject to
  • passage of tax
  • AS 29.45.800-.810 - Stranded gas development contract, exemption
  • AS 29.60.010 - State revenue sharing tax equalization formula
  • AS 29.60.080 - Definitions